PwC Economists have issued a stark warning predicting that nearly 30,000 businesses in the UK will collapse under the weight of high interest rates in 2024.
The research says company insolvencies will surge by 15% in the next 12 months as corporations and small businesses struggle to meet the repayments on debts run up to keep them solvent.
If PwC’s forecasts prove to be accurate, corporate insolvencies in the UK will reach their highest level since 2004 next year.
The research also suggests consumer prices will remain higher in 2024, despite falls to headline inflation predicting that consumer prices will still be around a quarter higher than in early 2021. So consumers will continue to readjust their spending based on their priorities and preferences.
Barret Kupelian, Chief Economist at PwC, said “There is also likely to be quite a lot of zombie businesses, namely those that have been riding the wave of low interest rates for a longer period of time, that are likely to face difficulties as well.
There remain many ‘known unknowns’ in 2024 that can change the trajectory of the UK, such as volatility in global energy prices due to the continued middle eastern conflict and the forthcoming General Election, however, overall the outlook is far rosier for 2024 than expected twelve months ago.”